The head of the US central lender has hit back at uncertainty-taking that his post might be in jeopardy as Donald Trump prepares to assume power in Washington.

Federal savings chairman Jerome Powell said he would not step down if Trump asked and that it is “not permitted under law” for the White House to force him out.

Mr Powell was responding to questions from reporters at a press conference after the lender announced a cut to borrowing costs, lowering the Fed’s key lending rate to the range of 4.5%-4.75%.

Forecasters have been expecting borrowing costs to fall further in the months ahead but warned that Trump’s plans for levy cuts, immigration and tariffs could keep pressure on expense boost and drive up government borrowing, complicating those bets.

Trump has pledged to impose import duties of at least 10% on all goods coming into the country, costs that economists declare would be passed onto consumers, helping to drive up prices.

levy cuts could also stoke expense boost by encouraging spending, while the mass deportations of immigrants proposed by Trump would make a large hole in the US workforce that could drive up wages.

gain rates on US obligation have already jumped this week, reflecting those concerns.

Mr Powell said on Thursday that it was too early to inform how the recent administration’s agenda might affect the US economy – or how the Fed should respond.

“It’s such an early stage – we don’t recognize what the policies are, we don’t recognize when they will be implemented,” he said. “In the near term, the election will have no effects on our policy decisions.”

Mr Powell was named chairman of the Fed by Trump in 2017, but later became a frequent target of his criticism.

During his first term, Trump called lender officials “boneheads” on social media and reportedly consulted advisers about whether he could fire Mr Powell.

This year, US media have reported that Trump allies have been looking at ways for the White House to assert more control over the Fed, including potentially sidelining Mr Powell by prematurely naming his replacement.

Trump has said repeatedly he believes he has the correct to voice his views on Fed actions. He told Bloomberg over the summer that he would let Powell serve out his term, which ends in 2026, “especially if I thought he was doing the correct thing”.

However, Powell said on Thursday that he would not step down if ordered to by Trump, and that an attempt to oust him before his term is over is “not permitted under the law”.

Mr Powell has faced heavy scrutiny over the last few years, as prices started surging in 2022.

The lender responding by hiking rates rapidly that year, ultimately raising them from near zero to roughly 5.3% as of July – the highest rate in more than two decades.

Those rises affected the community in the form of higher borrowing costs for financing cards, mortgages and other loans, helping to fuel discontent about higher living costs, especially for housing, that played a role in the election.

The Fed started to reverse course in September, slashing rates by a bigger-than-usual 0.5 percentage points, saying it was confident that the pace of worth rises in the US was stabilising.

expense boost in the US stood at 2.4% in September, down from more than 9% in June 2022, according to the latest official figures.

The cut announced on Thursday, which was widely expected and unanimous, marked the second drop in a row, lowering rates by a further 0.25 percentage points.

Mr Powell said on Thursday officials remained equally concentrated on keeping prices stable and the job trade well.

Though concerns flared earlier this year about rising unemployment, those quietened in September, after data showed an unexpectedly powerful burst of hiring.

However, the latest figures showed almost non-existent job growth in October, when the country was grappling with hurricanes and strike actions.

Mr Powell said officials expected to continue to cut rates, but how quick and how far remained to be seen. He resisted questions seeking more precise guidance.

“We don’t ponder it’s a excellent period to be doing a lot of further guidance – there’s a fair amount of uncertainty,” he said. “The point is to discover the correct pace and goal as we leave.”

Whitney Watson, co-chief capital distribution officer of fixed turnover at Goldman Sachs resource Management, said her firm expected to view another rate cut in December, but acknowledged questions about the path ahead.

“Stronger data and uncertainty over budgetary and trade policies cruel rising risks that the Fed may opt to leisurely the pace of easing,” she said, noting that the central lender might commence to “skip” rate cuts next year.

The selection by the Fed came the same day that the lender of England warned that it could receive longer for borrowing costs to fall, warning that expense boost could creep higher after last week’s distribution.

“On both sides of the pond, we are seeing expectations for upcoming rate cuts being scaled back considerably compared to what many had originally hoped for,” said Lindsay James, capital distribution strategist at Quilter Investors.

“In the US, it seems gain rates will remain higher for longer as the Fed will require to tread very carefully until it is better able to assess the factual impact of Trump’s plans.”